Cross Campus Inc. commands 3% of the flexible office space leasing market in greater Los Angeles, but that will change if Chief Executive Ronen Olshansky’s plans materialize.
The Santa Monica-based coworking company, which has 220,000 square feet of space under management, is “actively in discussions with similar businesses to acquire them,” Olshansky said. “This next phase of growth will take us from a leading brand in L.A. to a dominant Western region brand.”
Cross Campus is raising capital to finance its planned acquisitions. According to reports, the company is expected to bring in $30 million to $50 million in a Series B funding round. To date, it has raised at least $7.1 million, according to PitchBook Data Inc., with Brentwood-based private real estate company Lowe among its backers.
The expansion plans come on the heels of a recent acquisition that extended Cross Campus’ reach to San Diego and Scottsdale, Ariz. The company purchased San Diego-based DeskHub, a bolt-on acquisition that added 300 members to Cross Campus’ roster of 2,500, with clients ranging from startups to Fortune 50 companies. Terms of the deal were not disclosed.
Cross Campus’ competition, however, is not sitting idle. New York-based WeWork Cos. Inc., which has 30 locations in greater Los Angeles and holds 32% of the flexible space market here, announced plans to go public in September and raise “several billion dollars,” which would give the company a valuation of around $36 billion, according to the Wall Street Journal.
Cross Campus, which has 50 employees, also competes with IWG, a group that commands 24% of the local market and includes Regus with 67 locations and Spaces with 11. Smaller players on the local scene are Premiere with 8% and Barrister at 6%, according to CBRE Group Inc. Cross Campus is on par with Industrious, which has 234,000 square feet of coworking space across six locations in Los Angeles.
Olshansky co-founded Cross Campus in 2012 after several stints on Wall Street and business ventures in Brazil and Moscow. He was inspired by a “similar concept,” he said, which solved a problem he’d faced as a budding entrepreneur in Santa Monica. He had all the tools to be successful, he said, including the seed money, a website, a brand and the technology platform ― everything but colleagues to collaborate with.
“I sat there by myself, and I just felt like the walls are caving in on me,” Olshansky said. “Humans are generally social creatures, and so we really thrive from interacting with others, which is why the vast majority of people find they’re not productive working out of the home.”
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